The upstart has done it again. For the second straight year, Rival Systems has claimed the prize for having the best commodities trading platform for the buy side. Launched in 2015, the company has quickly won over converts thanks to its derivatives trading front-end, Rival Trader, which is paired with its Rival API, a low-latency C++ development platform, replete with in-process market data feed handlers and execution gateways. And if there’s one word that you can attach to Rival’s complete offering to explain its success, it is automation. For example, the platform includes the firm’s Auto-Quoter offering, a market-making engine that uses advanced quoting logic to create a synthetic underlying price, while its Electronic Eye automatically seeks to find alpha as new spreads are added to the firm’s spread book during the course of the day. And this year, Rival unveiled an integrated FPGA solution that automatically cancels market-makers’ options quotes and orders in sub-microseconds, according to Rob D’Arco, CEO of Rival Systems.
Automation adds speed and accuracy. This is vital in all forms of trading, but especially so in the commodity options spread markets where volumes have ballooned recently. The futures markets in commodities are also highly illiquid and can whip around at breakneck speeds, D’Arco says. When doing this manually, opportunities can be lost instantly. When combining the above-mentioned capabilities, commodities traders can use the Rival platform to predict when the market will move, which allows them to get ahead of the curve in revising their quotes and trade with resting orders before the underlying top-of- book updates. “There’s functionality that just works out-of-the-box and it’s geared toward making it easier for people to use, especially in the commodity markets to run automated making strategies, taking strategies and giving them the tools that are at the same level as the other best proprietary systems out there,” D’Arco says.
On top of its efforts in the automation space, Rival has also been busy pushing into the energies market. The challenge here is that the Chicago Mercantile Exchange (CME), Intercontinental Exchange (ICE) and the Nasdaq Futures Exchange (NFX) list virtually the same products, D’Arco says. Rival has created functionality to allow users to trade on all three exchanges and have the ability to—once more—automatically manage each different set of products, depending on the exchange, rather than how traders currently do this, which is a largely manual process. And for 2018, Rival Systems will look to grow its presence by expanding its operations into Asia and into the equity options market, D’Arco says. While Rival is young, it is also maturing rapidly.
Should regulators take a more active role when it comes to AI oversight, or leave it to the professionals? What will M&A look like in 2018?Subscribe to Weekly Wrap emails